NAFTA: Game Over for US Ban on Mexican Trucks

Here's something I hope that we can all agree is a good outcome. A sore point among many in US-Mexico relations has been the truck ban imposed on trucks making deliveries from Mexico to its ertswhile NAFTA "trade partner" the US of A. You see, trucker-protectionists were successful in convincing rather gullible lawmakers (who count on union votes) that Mexican truckers were a road safety hazard. This despite Mexican truckers actually having a better safety record than their US counterparts prior to the ruling, but that may be behind us now (hopefully). For more on the background of this conflict, see my earlier post.

Aside from the soft bigotry of no border-crossing expectations--"driving while Mexican" became an offence to critics of the practice like myself--there were also associated costs passed on to consumers of burdensome loading at the border so American trucks could carry on these goods to their CONUS destinations. Wasted gas, wasted labour, and environmental effects due to the border hold up were all in evidence.

What may have swayed the--I can't say Americans here out of confusion--"USers" is that NAFTA's dispute settlement body rightly ruled against the US government's law and enabled the Mexicans to apply tariffs in retaliation. The deal Obama and Calderon struck involves gradually removing these tariffs subject to Mexican trucks being allowed to ply their trade Stateside based on safety verifications. From the WSJ:

President Barack Obama and Mexican President Felipe Calderon unveiled a deal resolving a longstanding dispute over cross-border trucking that has subjected the U.S. to billions of dollars in punitive tariffs. The plan, announced at a news conference by the two presidents, will allow for half of those tariffs to be lifted immediately. It will establish a reciprocal, phased-in pilot program that allows Mexican trucks to operate inside the U.S. provided they comply with a series of safety, driver-skills and language tests monitored by the U.S. Department of Transportation.

The U.S. had effectively banned Mexican trucks from crossing the U.S. border, after the Teamsters union and others said the trucks weren't safe. The ban was ruled a violation of the North American Free Trade Agreement, and subjected the U.S. to punitive tariffs by Mexico on a range of goods, from foods to Christmas trees. The deal to end the dispute "is built on the highest safety standards that will authorize both Mexican and U.S. long-haul carriers to engage in cross-border operations under Nafta," a senior administration official said.

Mexico would lift 50% of the tariffs when the final agreement for a new program is signed by both nations. The remaining 50% would be lifted when the first Mexican carrier receives authorization under the new program. The U.S. Trade Representative's office would ensure the tariffs are lifted as agreed...

Ultimately the agreement to end the dispute would suspend $2.4 billion in annual punitive tariffs on the U.S. It was billed by the White House as a job creator for both nations. The Transportation Department hopes to have a proposed agreement available for congressional briefings and public notice and comment by late March or early April. After responding to public comments, the U.S. would finalize the agreement with Mexico. "This is a very positive development, but it is not a done deal," an administration official said, adding some details are still being negotiated.

The dispute has simmered for more than 20 years, fanned by labor unions and their allies in Congress who secured repeated bans on Mexican trucks in the U.S. The disagreement has forced goods headed from Mexico into the U.S. to be re-loaded into U.S. trucks at the border.

Under the agreement, trucks will be required to have electronic on-board recorders to track compliance with U.S. hours-of-service laws. Mexican trucks would further be required to comply with all U.S. motor-safety standards. Drivers would have to undergo testing for knowledge of English and U.S. safety laws and would be screened for illegal drug use.

I have no doubt Mexican truckers will meet these stipulations since the charges against them that led to the previous rule was trumped up to begin with.